Analyst William Janela of Mizuho Securities maintained a Hold rating on Hess (HES – Research Report), retaining the price target of $205.00.
William Janela has given his Hold rating due to a combination of factors influencing Hess’s stock potential and current market dynamics. Despite Hess Corporation delivering a solid quarter with production and cash flow surpassing expectations and managing lower capital expenditures, the uncertainty surrounding the completion of the acquisition by Chevron (CVX) plays a significant role in this cautious outlook. Janela’s assessment reflects a careful consideration of the pending arbitration with ExxonMobil (XOM) over the right of first refusal in Guyana, which Hess aims to resolve by the end of the year.
Moreover, Janela’s valuation takes into account the guidance update for the second quarter and the full year of 2024, noting an increase in production forecasts yet acknowledging the planned maintenance that might lead to a slight quarter-over-quarter decrease in production. The maintenance of a $205 per share price target aligns with the proposed exchange ratio with Chevron and Janela’s price target for CVX stock. While the net asset value (NAV) estimate has been modestly increased, it seems that the current valuation and Hess’s circumstances support a neutral, Hold rating, suggesting that the stock is fairly valued at this time.
According to TipRanks, Janela is a 5-star analyst with an average return of 33.5% and a 64.52% success rate. Janela covers the Energy sector, focusing on stocks such as Civitas Resources, Hess, and Vital Energy.
In another report released on April 29, Jefferies also reiterated a Hold rating on the stock with a $166.00 price target.
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Hess (HES) Company Description:
Hess Corp is an exploration and production company, which engages in exploration, development, production, transportation, purchase & sale of crude oil, natural gas liquids and natural gas with production operations. It operates through the following segments: Exploration and Production and Midstream. The Exploration and Production segment explores for, develops, produces, purchases and sells crude oil, natural gas liquids and natural gas. The Midstream segment provides fee-based services including crude oil and natural gas gathering, processing of natural gas and the fractionation of natural gas liquids, transportation of crude oil by rail car, terminaling and loading crude oil and natural gas liquids, and the storage and terminaling of propane, primarily in the Bakken shale play of North Dakota. The company was founded by Leon Hess in 1920 and is headquartered in New York, NY.
